What Can the IRS Do to Collect Back Taxes?
January 27, 2022
IRS Items to be Aware Of
Opening the mailbox and finding a letter from the IRS is frightening, but what happens next can be even scarier. The tax agency wields incredible power, and if they claim you owe additional taxes they have many different options for forcing you to pay.
When the IRS claims you owe additional money, they will act quickly, and that could leave you reeling, and trying hard to preserve the money you need to pay your bills, feed your family and keep a roof over your head. If you are employed, the IRS can reach into your paycheck, forcing the company you work for to withhold part of what you are owed until the tax debt has been satisfied.
The IRS can also hold onto any refunds and government payments you would otherwise be due. If you have been waiting for that big fat refund check to arrive, you could be waiting a long time if you owe money to the IRS.
As if all this were not frightening enough, the tax agency also has the power to levy your bank accounts, including the accounts you need to run your business and your life. Those bank account freezes could leave you without the cash you need, putting you in a real bind and forcing you to pay back what you owe.
Your home could even be at risk if you owe money to the IRS. The tax agency could, for instance, apply for a lien against not only your primary residence but any other real estate you own. The threat of this kind of action has compelled many taxpayers to cough up the money the agency says they owe, even if they think the IRS is wrong.
As you can see, the IRS has wide latitude and plenty of power, and the tax agency is often unwilling to settle for less than the government says you owe. If you disagree with the amount the IRS is asking for, or if you simply do not have the money to pay the bill, you need to act fast. Ignoring the problem will only make it worse, and you cannot simply pretend that you never pulled that fateful envelope out of your home mailbox.
If you are on the wrong end of a compliance action by the IRS, you cannot afford to leave anything to chance, and you certainly should not try to fight back on your own. The tax code is complex, and far more pages than the Bible, and like that holy book, many of the terms are arcane and difficult to understand.
When fighting the IRS, you need the help of a professional, and that is where a tax resolution export comes into play. By working with a professional you can fight back on an even playing ground, and the money you save could be worth far more than the fee you pay.
Our firm specializes in tax resolution and helping people who owe the IRS or state $10,000 or more. We’ve seen taxpayers get blindsided every year by a huge tax bill and often falling behind on their taxes for years on end. If that’s you, we can help. Contact our firm today to discuss your tax debt settlement options. Call us now!
It seems like natural disasters such as hurricanes, floods, earthquakes, wild fires, and tornados are happening all the time and just about everywhere. Climate change also seems to be making these disasters more deadly and more destructive. Many people do step up to help survivors with needed financial donations. The only thing worse than the disasters themselves are the scammers that exploit these situations for financial gain at the expense of hard working and well-i ntentioned survivors and donors. Like yourself! Scams can take the form of fake charities and impostors posing as legitimate organizations or government agencies. Common scams typically entail vague appeals for donations without details, fake websites with names like real charities and caller ID tricks to appear legitimate. Several warnings signs of these scammers are: 1) pressure to give immediately, often preying on your emotions and not logic 2) a thank-you for a previous donation you don’t recall making 3) a request for payment by cash, gift card or wire transfer. The last are scammers’ favored payment methods because the money is easy to access, difficult to trace and almost impossible to cancel. A legitimate charity will welcome your donation whenever you choose to make it and by whatever means you choose. A great way to verify their legitimacy is to use the IRS Tax Exempt Organization Search tool at https://apps.irs.gov/app/eos/. Additionally, clients should always ask for a receipt and then check their bank or credit card statements to ensure the donation amount is accurate. If you think you were a victim of a suspected scam, you can and should report them to the Federal Trade Commission at https://reportfraud.ftc.gov/. How Advantage Tax Relief Can Assist You At Advantage Tax Relief, based in Itasca, IL, we have over a decade of experience helping individuals and businesses resolve tax issues. Our team specializes in offering personalized tax relief and tax resolution solutions tailored to your unique needs. We will work with you to assess your situation and explore your options, whether it’s an Offer in Compromise, installment agreements, or other strategies. Our experience allows us to identify the best path forward to ease your tax burden and guide you toward financial freedom. If you're facing tax debt, don't wait. Advantage Tax Relief is here to assist you with effective, professional help. Call Advantage Tax Relief today at 630-773-3200 to schedule a consultation and take the first step toward resolving your tax issues.
Under the new One Big Beautiful Bill Act (OB3), qualified tips are any cash tip received by an individual with a valid Social Security number and in an occupation that 'customarily and regularly' received tips on or before Dec. 31, 2024. They include tips that are paid in cash or charged. The Treasury Department has not yet released the “official” list of occupations that qualify for the No Tax on Tips Regulations. It is expected, though, that the job titles will include but not be limited to those listed below: 1) Food & Beverage : Bartenders, Wait Staff, Servers, Chefs, and Cooks 2) Entertainment: Gambling Dealers, Change Persons, Booth Cashiers, Dancers, Musicians, Singers, Entertainers, and Other Performers 3) Personal Services: Personal Care Workers, Private Event Planners, Photographers, Videographers, Event Officiants, Pet Caretakers, Tutors, Nannies, and Babysitters. 4) Personal Appearance & Wellness: Skincare Specialists, Massage T herapists, Barbers, Hairdressers, Cosmetologists, Manicurists, Exercise Trainers, and Group Fitness Instructors. 5) Recreation : Golf Caddies, and Tour & Travel Guides. 6) Transportation : Ride Share, Taxi, and Food Delivery, Drivers, Porters, and Sky Caps. The final list is expected to be issued in October, 2025. Some implications of the No Tax on Tips Regulations. First , the deduction is for qualified tips of up to $25,000 per year regardless of how many employers you have during the year. The tax savings will be in the form of a tax deduction when you file your Federal tax return the following year. Second , qualified tips must be reported to the individual on one of three forms to be eligible for the deduction; a) Form W-2; b) Form 1099-NEC, Nonemployee Compensation; or c) Form 1099-K, Payment Card and Third-Party Network Transactions. Third , it only applies to Federal income taxes. It does not include State, Local, Social Security or Medicare taxes. Finally, the maximum annual deduction of $25,000 for single filers and $25,000 each for joint or married filing separately filers phases out by $100 for each $1,000 for taxpayers with modified adjusted gross income over $150,000 (or $300,000 for joint filers). How Advantage Tax Relief Can Assist You At Advantage Tax Relief, based in Itasca, IL, we have over a decade of experience helping individuals and businesses resolve tax issues. Our team specializes in offering personalized tax relief and tax resolution solutions tailored to your unique needs. We will work with you to assess your situation and explore your options, whether it’s an Offer in Compromise, installment agreements, or other strategies. Our experience allows us to identify the best path forward to ease your tax burden and guide you toward financial freedom. If you're facing tax debt, don't wait. Advantage Tax Relief is here to assist you with effective, professional help. Call Advantage Tax Relief today at 630-773-3200 to schedule a consultation and take the first step toward resolving your tax issues.
First, working overtime does not mean you are getting an automatic increase in your take-home pay because it is not going to be taxed. That is not what is going to happen. The tax savings will be in the form of a tax deduction when you file your Federal tax return the following year. There will be no immediate impact. Second, it only applies for Federal income taxes. It does not include State, Social Security or Medicare taxes. Third, it also only applies to the overtime premium and within certain deduction and wage limits. You can only deduct the pay that exceeds your regular rate of pay. The 'half' portion of 'time-and-a-half' compensation. For example, say you make $20 per hour and work 5 hours of overtime that week at time-and-a-half. The deduction would the Federal tax on $50 of premium pay. ($20 divided by 2 times 5 hours) Finally, the maximum annual deduction is $12,500 for single filers and $25,000 for joint filers. The deduction phases out for taxpayers with modified adjusted gross income over $150,000 (or $300,000 for joint filers).
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